Peer review process called into question

Two hospitals sued over credentialing issues

Pay close attention to the following cases, both projected to go to trial as this issue of Hospital Peer Review goes to press or shortly thereafter. These cases demonstrate that your credentialing efforts affect more than the good names, careers, psyches, and bankbooks of your medical staff; credentialing could seriously impact the reputation, coffers, and longevity of your very institution.

Two hospitals, one in North Carolina and one in Georgia, are being sued by patients after surgeries that went bad. If there’s a lesson to convey, it is that credentialing procedures must be followed to the letter, documented, and reviewed often.

A North Carolina hospital is being sued by a patient who was injured following surgery by a doctor who was credentialed by the hospital but who wasn’t board-certified.1 The suit alleges that First Health Moore Regional Hospital in Pinehurst, NC, failed to follow its own credentialing procedures for granting a doctor privileges and did not "consider" the doctor’s lack of board certification as required by standards promulgated by the Joint Commission on Accreditation of Healthcare Organizations in Oakbrook Terrace, IL.

Moore Regional inquired about certification status, not only in the original application, but also in every application for renewal of privileges, according to the hospital’s defense attorney, Sam Southern, JD, of Raleigh, NC. On each occasion, the physician disclosed that he was not board- certified. The American Board of Neurological Surgery had never certified the doctor, and court records indicated that he had failed the certification exam three times.

Moore Regional first granted the doctor privileges in neurosurgery in 1975 and had renewed those privileges every two years since then, "based on the physician’s training, experience, and demonstrated competence," Southern says. "He was grandfathered in." Such a practice of "grandfathering" physicians based on their experience, rather than on their test grades, is not uncommon in those hospitals that have transitioned to board certification as a requirement for medical staff membership, the attorney explains.

Where state law meets JCAHO

In 1992, Joint Commission standards stated that board certification of a physician in an area of practice is "an excellent benchmark and is [to be] considered when delineating clinical privileges."

In 1993, the doctor in question performed neck surgery on the plaintiff. When the patient became quadriplegic, he sued Moore Regional and the surgeon, alleging that the hospital negligently granted the surgeon privileges, failed to ascertain whether he was qualified to perform neurological surgery, and failed to enforce Joint Commission standards. The suit further alleged that those negligent acts caused his injuries. At trial, the patient’s medical expert alleged that the hospital did not "consider" the doctor’s lack of certification or his repeated failure of the certification exam. In response, Moore Regional’s medical staff manager testified that board certification was not an issue in recredentialing. However, under North Carolina case law, a hospital’s failure to comply with Joint Commission standards can be evidence of negligence.

When the case first came to trial in 1997, the trial judge entered judgment in favor of the hospital as a matter of law, finding insufficient evidence of hospital negligence to send the case to the jury. The case against the neurosurgeon proceeded, and the jury returned a $10 million verdict in favor of the plaintiff. After winning that case, the plaintiff appealed his loss to the hospital. The appellate court reversed and remanded the case against the hospital, which is now set for trial in October. The reversal hinged on whether the hospital had "considered" the doctor’s lack of board certification and therefore whether it complied with Joint Commis sion standards. Although the application question revealed that Moore Regional was aware that the doctor was not board-certified, the court ruled that there was no conclusive evidence that, in deciding to recredential him, the hospital had "considered" his lack of certification and the fact that he had failed the exam three times, the court ruled.

"The appellate court reasoned that JCAHO standards require that board certification be considered’ by a hospital when granting medical staff privileges, and that the board certification inquiry on the application for privileges is not conclusive on the issue," Southern says. "As a general proposition, the plaintiff’s bar has been able to effectively use the Joint Commission as a weapon against hospitals in medical negligence cases, and the Joint Commission has not been as helpful as it might be in helping hospitals deal with the problem."

In deciding the issue, Southern points out, "the jury is not permitted to learn of the earlier verdict against the physician. Of course, they will be aware that the plaintiff is a quadriplegic with severe and irreversible spinal cord injuries. Sympathy often plays a significant role in these catastrophic injury cases."

The issue of the confidentiality of peer review will play an important role in the pending trial. The application itself is discoverable as evidence under North Carolina law, and is admissible in evidence. The credentialing process itself, however, is not subject to discovery and it may not be admitted into evidence. (See next month’s issue for more information on how the confidentiality of the peer review process is being eroded in hospitals across the country.)

According to Southern, North Carolina has a strong peer review confidentiality statute, which trial courts have traditionally strictly enforced. "The credentialing process is sacrosanct. For policy reasons, plaintiffs cannot have access to it, even when it becomes relevant to issues in the lawsuit. The policy is to promote the public health by encouraging candor and objectivity in the credentialing process, a policy which I fully support."

But the immunity given to peer review materials can also work against health care providers. "How does a hospital defend itself in this kind of case?" asks Southern. "Our Court of Appeals has held that a plaintiff’s expert can create an issue of fact as to whether a hospital really’ considered an applicant’s board certification status. But our Supreme Court has held recently in an unrelated case that peer review materials cannot be admitted into evidence, even if a party chooses to make them public records. Even if I wanted to disregard public policy and pull back the curtain, I probably cannot do so, even to defend the hospital. I could not use peer review minutes, data bank information, quality assurance materials, and the like to prove to the jury that the hospital, in fact, gave careful consideration to a particular physician’s competence, including his or her board certification status.

"If peer review is going to work, it has to be sacred," Southern says. "It’s unfortunate that, in North Carolina, any case involving the care of a non-board-certified physician — and that’s half of them — where a hospital is the codefendant, there is what is called issue of fact with respect to credentialing. The issue of fact can be given to a jury."

Moore Regional is a 400-bed, acute care, not-for-profit facility that serves as the referral center for a 14-county region in the Carolinas. Its medical staff includes 140 physicians.

In the Georgia case, the skills of another neurosurgeon were being called into question even as her hospital was recommending her services to patients who called its referral service. The Atlanta neurosurgeon performed a series of operations on a young male child, but the child became worse rather than better. The boy’s parents sued the neurosurgeon in 1995, but it was after they learned about the hospital’s longstanding concerns about the surgeon’s performance that they filed suit in April against her hospital, Scottish Rite Children’s Medical Center in Atlanta. In their suit, the parents accuse the hospital of fraud, deceit, and misrepresentation, alleging that the hospital recommended the physician even though hospital officers had serious concerns about her abilities.

The complaint alleges that credentialing committees at Scottish Rite were in the process of reviewing the surgeon’s privileges at the time her services were recommended, and that administrators had "grave concerns" regarding the surgeon’s ability to provide competent care as early as 1986. According to the complaint, various ad hoc committees were formed to review the surgeon’s patient care from 1986 until her privileges were revoked in 1993.

The surgeon sued over her dismissal, claiming gender and age discrimination. A U.S. district judge in 1998 ruled in favor of the hospital, dismissing the surgeon’s discrimination claim. The court records have subsequently been sealed. However, it was the peer review information disclosed at this trial that alerted the parents and triggered their suit against Scottish Rite.

"In Georgia, we don’t have laws that make the physician credentialing records and peer review documents accessible to patients," Karen Koser, media relations director at Scottish Rite, tells HPR. "Patients can find out if doctors are board-certified, where they attended medical school, and where they practice, but not if there’s anything outstanding against them, such as malpractice actions."

Glen Moffett, JD, the plaintiff’s attorney in the parents’ pending suit against Scottish Rite, acknowledges that peer review records are not discoverable in Georgia. He tells HPR, "This is a law that has confidentiality provisions connected with it, and that is one of the things that will be tested during the course of this litigation.

"There are good arguments to have these laws on the books," says Moffett. "We want peer review members to be able to talk forthrightly and honestly to try to correct problems. How ever, it’s unfortunate that some of those committees abuse those rights, and it’s that type of situation that brings those laws back into contest or review to see if they should be loosened or tightened."


1. Hospital Litigation Reporter 1998; X(1)January. Carter v. Hucks-Folliss, No. COA97-1530 (N.C. Ct. App. 1998) - DEx 61085, 3 pp. Tommy Carter and Tracy Carter, Administrator of the Estate of Phyllis Carter, Plaintiffs v. Anthony G. Hucks-Folliss; Pinehurst Surgical Clinic, P.A.; and Moore Regional Hospital, Inc., Defendants.